The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 2) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments to the Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 2) 2007 as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

In order to discourage the use of circular chains of trusts to disguise the identity of the final beneficiary of trust income, trustee beneficiary non-disclosure tax is also imposed on the first trustee beneficiary where trust income is further distributed to another trust.

The rate of the trustee beneficiary non-disclosure tax is currently 46.5 per cent, the top marginal rate of 45 per cent plus the current Medicare levy rate of 1.5 per cent.

The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 2) Amendment (DisabilityCare Australia) Bill 2013 will increase this rate from 1 July 2014 to 47 per cent, to reflect the increase in the Medicare levy from 1.5 per cent to 2 per cent.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.